Michigan’s economic future

a new look

Charles L. Ballard

Publication Year: 2010

This accessible, engaging text examines the impact of the trends that have shaped Michigan’s economy, and offers innovative solutions to the current economic crisis. Charles Ballard’s illuminating book explores the structure of Michigan’s economy, including its roots in agriculture, the rise and fall of the automotive industry, and the long-term decline of manufacturing. Ballard proposes that investing in education to create a highly skilled workforce can help Michigan’s people to compete in the rapidly evolving global economy. Discussing the state’s transportation infrastructure, environment, public expenditures, and tax system, Ballard describes how changes in attitudes, policies, and political institutions will help to promote economic recovery and growth.

Contents

Acknowledgments

I was one of the editors of Michigan at the Millennium: A Benchmark and Analysis of Its Fiscal and Economic Structure, a volume of research papers on the Michigan economy.1 About a year after Michigan at the Millennium was published in 2003, Michigan State University president Lou Anna Simon expressed a desire for a shorter book about Michigan’s economy. The result was Michigan’s Economic Future: Challenges and Opportunities, published in 2006. Michigan’s economy has gone through momentous changes since then, and I am pleased to be ...

Introduction

In 2003, the Michigan State University Press published Michigan at the Mil-lennium: A Benchmark and Analysis of Its Fiscal and Economic Structure.1 It was an honor for me to serve as one of the editors of this landmark work, which was sponsored by Michigan State University, the University of Michigan, and Wayne State University, with additional financial support from the Charles Stewart Mott Foundation. It includes thirty-three chapters covering nearly every aspect of economic life in Michigan. Because of its exhaustive coverage, ...

1. An Overview of the Michigan Economy

This book is concerned with the economic policy issues facing Michigan. However, before we can dive into policy discussions, we need a basic understanding of the facts of the economy. What’s big? What’s little? What’s growing? What’s shrinking? The purpose of this chapter is to provide some of those basic facts, in four areas: First, we look at the industrial composition of Michigan’s economy and compare it with the economy of the United States as a whole. We pay special attention to the long-term decline of the manufacturing sector and the ...

2. Michigan’s Human Resources

Michigan’s greatest asset is its people. In this chapter, we consider the population, labor force, and educational system in Michigan. We begin with a brief look at the trends in population.1In 2009, Michigan had a population of about 9.97 million. This makes Michigan the eighth-most populous state. Table 2.1 provides some perspective by showing the twenty states with the largest populations in 2009.2 Michigan entered the union in 1837. The first census after statehood was in ...

Chapter 2 was concerned with Michigan’s human resources. In this chapter, we turn to Michigan’s physical resources. We begin with a discussion of the transportation system, with special emphasis on highway construction and maintenance. Later in the chapter, we consider the closely related issues of land use and the environment. If you drive often in Michigan, you probably know that many of our roads are bone-jarring, teeth-rattling nightmares. By not maintaining our roads and bridges, we in Michigan are doing damage to our economy. A well-maintained ...

4. Michigan and the World Economy

In earlier chapters, we discussed the effects of Michigan’s geographical isolation from the rest of the United States. This presents a challenge since it is difficult for some parts of Michigan to maintain economic connections with the rest of the country. Therefore, it is important for us to take advantage of the connections that we do have. Our relationships with the rest of the world, beyond the borders of the United States, present similar challenges and opportunities. Once again, geography plays an important role. Michigan ...

5. Other Budget-Related Issues and Policies in Michigan

Directly or indirectly, almost every issue of economic policy in Michi-gan is affected by the budgets of the state government and local governments. 1 In Chapters 2 and 3 of this book, we have already touched on several issues of importance to Michigan’s government budgets. Chapter 2 covered education, which is an especially important category of government expenditure in Michigan. The various policy issues discussed in Chapter 3 also have implications for the budget. In this chapter, we turn to ...

6. The Tax System in Michigan

In the words of Supreme Court Justice Oliver Wendell Holmes Jr., “Taxes are what we pay for civilized society.” On the other hand, nobody enjoys paying taxes, and taxes can damage the workings of the economy. The tension between the benefits of public services and the costs imposed by taxes is one of the most important concerns of economics. One of the central objectives of tax policy is to choose the best possible overall level of taxes. Another objective is to choose the best possible mix of income taxes, sales taxes, property taxes, and other revenue sources. These two issues ...

7. What Will Michigan’s Economy Be Like in 2030?

On December 1, 1862, in the midst of the greatest crisis in American history, Abraham Lincoln sent his second annual message to Congress. He wrote, “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country.”The difficulties facing the people of Michigan today are not nearly as ...

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